The UK’s fuel retailers have been accused of delaying price cuts at the pumps and causing misery for millions of drivers in a “classic example” of rocket and feather pricing.
Petrol and diesel prices have continued to climb over the last week despite a drop in the wholesale price the fuel firms pay.
The average price of petrol exceeded £1.90 per litre over the weekend, hitting 191.05p on Sunday 27 June, accoriding to data firm Experian.
Diesel fell back very slightly from 199.09p on Saturday to 198.94p on Sunday but the RAC’s Simon Williams said that unless retailers begin to pass on their savings to customers, it could still break the £2 per litre barrier.
Mr Williams also said the Competition and Markets Authority (CMA) would “no doubt” be looking very closely at retailers’ willingness to raise prices sharply as wholesale costs increase but refusal to pass on reductions at the same rate - the so-called rocket and feather approach to pricing.
The CMA has been ordered to carry out a “short and focused review” of fuel prices by Business Secretary Kwasi Kwarteng amid concerns March’s fuel duty cut has not been passed on to motorists.
Mr Williams said: “We are struggling to see how retailers can justify continuing to put up their unleaded prices as the wholesale cost of petrol has reduced significantly.
“This is sadly a classic example of ‘rocket and feather’ pricing in action, and one which the Competition and Markets Authority will no doubt be looking at very closely.
“It seems as if retailers are making matters worse for themselves by not lowering their forecourt prices despite having a clear opportunity to do so.
“The only explanation of retailers’ resistance to reducing prices is that they’re protecting profits in case of wholesale costs suddenly going back up.
“Ultimately, the longer they hold out, the more they benefit and the longer the misery continues for drivers struggling with the high prices.”
AA president Edmund King warned that “crippling” pump prices could “stifle summer staycations” at a time when airports are struggling to cope with demand.
He called on the Government to “urgently take action on price transparency and cut duty levels”.